§ The Minister for Information Technology (Mr. Geoffrey Pattie)With permission, Mr. Speaker, I should like to make a statement about the outcome of the joint offer of shares in British Aerospace by the Government and the company.
Approximately 264,000 applications were received from the general public, excluding institutional priority applications, for a total of approximately 790 million ordinary shares.
Preferential applications were received from shareholders for approximately 23 million shares and from employees for approximately 3 million shares. All such valid applications will be allocated in full.
Valid applications from the general public for up to 20,000 shares will be allocated a minimum of 100 shares and a maximum of 275 shares, depending on the number of shares applied for. No allocation will be made in respect of public applications for more than 20,000 shares. On this basis, allocations will be made to some 260,000 applicants for a total of some 40 million shares.
As announced on 1 May, approximately 80.8 million shares, 55 per cent. of the total offered shares, have been allocated to institutional priority applicants.
It is expected that dealings in renounceable letters of acceptance in respect of the offered shares will commence tomorrow.
§ Mr. John Smith (Monklands, East)Why is the language of the Minister's statement so contorted and convoluted that it is not possible to discover from it the amount that was raised in the sale? Was not the amount £550 million, and did not 55 per cent. of that go to the preferential institutions, with apparently only 2 per cent. finding its way to the employees, despite the Government's often-professed intention that shares should go to employees?
Are the Government somehow ashamed to reveal the total amount raised in the sale because of the increasing public perception that this is an exercise in selling off the furniture to pay the rent—that the money goes into the maw of the Treasury and is squandered by the Government while the public lose the prospect of future profits from a shareholding?
Have not the Government yet realised that they have finally betrayed the promise which they gave the House of Commons during the passage of the legislation that they would retain 25 per cent. of the shareholding?
§ Mr. SmithThe Secretary of State for Trade and Industry shakes his head and says, "Not again." It is not surprising that the House of Commons should remind Ministers about their breaches of promises to the House. We shall continue to remind the Government that they gave a solemn undertaking to retain 25 per cent. of the shareholding to preserve the British national interest and that they have evacuated and abandoned that commitment.
§ Mr. PattieOn that last point, the right hon. and learned Gentleman asked a similar question on 1 May. The answer that he was given then, he will not be surprised to know, has not changed since. The undertaking given by the Government in 1981 was to safeguard the national 41 interest. That has been done by the special share, the details of which are set out clearly in the prospectus, which I invited the right hon. and learned Gentleman to read. He seems to be seizing with some delight on the number of employees who have applied. I should have thought that 3 million shares applied for by the employees was a pretty satisfactory return.
I can tell the right hon. and learned Gentleman that 250,000 people have applied for shares—as well as the 89 per cent. take-up by existing shareholders—which is an indication of the confidence of people in the company. That is what it is all about.
§ Mr. SpeakerOrder. I remind the House that this is a private Members' day. I shall call all those hon. Members who have been seeking to catch my eye, but I ask them to put their questions as briefly as possible.
§ Sir Edward Gardner (Fylde)Is my hon. Friend aware that there is considerable anxiety among those of my constituents who are employed at the British Aerospace division at Warton about job prospects and particularly about the future of the proposed European fighter aircraft? Is he able to say at this stage what he anticipates will be the effect of the sale of the Government's residual shareholding on job security at Warton and also upon the international negotiations that are taking place about the future of the European fighter aircraft?
§ Mr. PattieThe sale which has been announced today will not adversely affect the job prospects of his constituents, about which he is rightly concerned.
I do not think that the specific outcome of forthcoming negotiations arise from my statement today.
§ Mr. Dennis Skinner (Bolsover)Will the Minister give the House a guarantee that no shares have been sold to foreign nationals, say, Libyan, Argentine or those of any of the other countries that have been involved in disagreements with British nationals during the course of, say, the past two or three decades?
§ Mr. PattieIf the hon. Gentleman is asking me whether the nationals of any countries that he likes to name have bought shares, obviously I cannot give any such guarantee. If they are free to deal on the stock market, they are free to buy shares. The national interest is wholly safeguarded by the special share and also by the references to the Monopolies and Mergers Commission which are built in.
§ Mr. Timothy Wood (Stevenage)I congratulate my hon. Friend because I, with 9,000 British Aerospace employees, am delighted that the share sale has been such a success and, furthermore, that we have 260,000 shareholders now taking an interest in the company. I believe that that is excellent for the future of British Aerospace.
§ Mr. Robin Corbett (Birmingham, Erdington)We all owned it before.
§ Mr. PattieI am grateful to my hon. Friend.
§ Mr. Tony Marlow (Northampton, North)Will my hon. Friend say how many employees have shares and what proportion they represent of the total labour force? Will he also say a little more about the basis of allocations? If someone applies for 2,000, 1,000 or 500 shares, how many will he get?
§ Mr. PattieAbout 2,500 members of the work force have applied for the approximately 3 million shares. That figures relates to a total work force of, say, 70,000 in round figures.
My hon. Friend asked me for the share allocation basis. Those applying for between 100 and 200 shares will have 100 shares allocated to them. Those applying for between 300 and 500 will receive 125. Those applying for between 600 and 700 will get 150. Those applying for between 800 and 900 will get 175. Those applying for between 1,000 and 1,900 will get 200. Those applying for between 2.000 and 3,800 will get 225. Those applying for between 4,000 and 9,500 will get 250. Those applying for between 10,000 and 20,000 will get 275. Those applying for more than 20,000 have had their allocations and applications, rejected.
§ Mr. Tony Banks (Newham, North-West)Will the Minister be taking any steps to monitor what happens to the shares after British Aerospace employees have them, to make sure that the Government's original aim is still being maintained? Does he think that many of them will want to make a quick profit, which is what his friends in the City will be doing?
§ Mr. PattieNot if the experience of British Telecom is followed. No doubt the hon. Gentleman would like to see that happen. To the best of our knowledge, 1.7 million individual shareholders have still retained their shareholding in that company.
§ Mr. Corbettrose—
§ Mr. SpeakerOrder. I do not know whether both hon. Gentlemen were here when I said that I would not call any hon. Member who had not been standing. However, I shall call the hon. Member for Berwick-upon-Tweed (Mr. Beith).
§ Mr. BeithAs the share allotment was the only new information in the statement, will the Minister accept some congratulation that he so geared the allotment that small shareholders will get shares, and some large shareholders will get none?
§ Mr. PattieThat was the Government's deliberate intention, as we wish to encourage wider share ownership.
§ Mr. Corbettrose —
§ Mr. SpeakerOrder. We must move on.